President’s Message

John F. Wood
NAPSLO President


The surplus lines industry was elated to hear of the legislative victory in Florida remedying an adverse court decision and is encouraged about prospects at the federal level that the NonAdmitted Reinsurance Reform Act (NRRA) will soon be reintroduced and approved by the U.S. House and Senate.

While our primary legislative focus over the past few years has been at the federal level securing approval of the NRRA, we became involved in Florida because the situation concerned an issue that challenged our freedom from form regulation, one of the tenets of our industry, as established in NAPSLO's Regulatory Principles.

The legislation, passed unanimously by both the Florida House and Senate, affirms the industry's exemption from regulation of forms and policies that was challenged by the Florida Supreme Court's ruling in Essex v. Zota, which said that surplus lines was exempt from the rating section of Chapter 627 of Florida's statutes (Insurance Rates and Contracts), but was subject to the chapter's other provisions, including form filings.

The success of these efforts is reflective of the significant amount of time the industry put forward in working with legislators and regulators on this issue. In July 2008 NAPSLO began meeting with the Florida Surplus Lines Association and the Florida Surplus Lines Service Office to explore the various options to resolve the issues around the Zota decision.

In October 2008, NAPSLO, the FSLA, Florida Insurance Council, PCIAA, AIA, Lloyd's, and the FSLO established a working group to develop a legislative solution. NAPSLO Director of Government Relations Steve Stephan participated in numerous conference calls on the issue and made five trips to Florida on legislative hearings, meetings with the Florida Insurance Department, and working group meetings.

Together, all of the group's efforts were successful in educating legislators about our industry and securing approval of a bill that will provide a retroactive solution (except for cases filed) and affirms our traditional freedom from form regulation.

Educating legislators at the state and federal levels about our industry is an important endeavor for NAPSLO. One of the functions of the NAPSLO PAC is to assist with our educational efforts at the federal level and, thanks to the NAPSLO PAC, we have made great progress in telling our story.

The NAPSLO PAC recently added the option to contribute online. NAPSLO members desiring additional information on their eligibility to contribute, or about the activities of the NAPSLO PAC, may contact Kevin Westrope, Chairman of the NAPSLO PAC, at kwestrope@westrope.com, or visit the "Legislation/Regulation" section of the NAPSLO website.

Because of federal law, NAPSLO PAC contributions are screened, and contributions from persons who are not solicitable must be returned.

While a solution to the Zota case has been found, Florida will continue to be on our minds this year as the 2009 NAPSLO Annual Convention is set for Oct. 7-10 in Orlando. Online registration will start in mid-June and the Convention Committee is working on finalizing details of another excellent meeting that will be interesting, informative, and beneficial. Please watch for the email at the end of the month with registration information, and be sure to review the convention materials and register early for the meeting.

NAPSLO programs and meetings are consistently well attended. The NAPSLO Annual Convention has always been the most important meeting for the surplus lines industry and this year's meeting will be an outstanding event. Be sure and make plans early so you can be among the attendees in Orlando. I look forward to seeing you there.